Quiziz No 1 Corporate Governance

Corporate governance is a process by which the owners, but not the creditors, exert control over the resources of the enterprise.

• true
• false

The development of strategic plans for a business entity is the responsibility of the board of directors.

• true
• false

The objective of corporate governance is to enhance long-term shareholder value without compromising the interest of other shareholders.<br />

• true
• false

A company with good corporate governance has a lower cost of capital and superior stock returns as compared to other companies.

• true
• false

Corporate Governance starts with shareholders or owners delegating responsibilities directly to operating unit.

• true
• false

The failure to find the fraud in Worldcom’s financials was on account of

• failure of internal control procedures.
• auditors’ negligence in audit planning
• failure to perform a test of asset additions correctly
• failure to attend the increased rental expenditure.

Financial Failures such as Enron, WorldCom are result of

• failure in the corporate governance structure
• faults in the Public Accounting Profession
• greed-infected professionals and management
• all of above

A proper system of corporate governance is one that demands

• decision making by auditors in place of management.
• accountability back through the system to the shareholders.
• internal audit representation on the board of directors.
• audit planning to obtain competent and sufficient audit evidence.

Corporate governance is a process by which the owners and creditors of an organization

• exert control.
• require accountability.
• exert control and require accountability.
• neither exert control nor require accountability.

The responsibility for operating an enterprise is delegated to the

• auditor.
• audit committee.
• management.
• board of directors.